Global Legal Monitor

China: Regulations on Customs Protection of IPR Amended

(Apr. 14, 2010) The State Council promulgated amended Regulations of the People's Republic of China (PRC) on Customs Protection of Intellectual Property Rights on March 24, 2010. The revisions affect articles 11, 23, 24, 27, and 28 of the 2004 Regulations. The amended Regulations entered into force on April 1. (State Council Decision on Amending the Regulations of the People's Republic of China on Customs Protection of Intellectual Property Rights (Decree No. 572) [hereinafter Decision] [in Chinese], Mar. 24, 2010, State Intellectual Property Office [SIPO] of the PRC, available athttp://www.sipo.gov.cn/sipo2008/yw/2010/201003/t20100329_509514.html.)

The term “customs protection of intellectual property rights” is defined under the Regulations as the protection provided by the Customs for the rights to exclusive use of trademarks, copyrights, copyright-related rights, and patent rights (“intellectual property rights”) [IPR] related to imported and exported goods and protected under the laws and administrative regulations of the PRC. (The State Council Promulgating the Newly Amended “Regulations on Customs Protection of Intellectual Property Rights,” 10 ISINOLAW WEEKLY (Mar. 22-Apr. 4, 2010), email newsletter from [email protected].) This definition remains unaltered.

Article 11 of the Regulations prescribes that when there is a change in circumstances of an IPR filing [this phrase is only slightly revised by the amendment], the IPR holder should, within 30 work days of the date when the change occurred, go through the procedures for modification or cancellation of the filing with the General Administration of Customs (GAC) (para. 1). A newly added paragraph 2 states that where an IPR holder has not gone through such procedures and adverse effects arise when the holder lawfully imports and exports for others or Customs conducts its inspection duties according to law, the GAC may revoke the relevant filing based on the application of the interested parties concerned and may also take the initiative on its own to revoke the relevant filing. (Decision, supra.)

According to article 23, paragraph 1 (underlining added), of the unamended Regulations:

[a]fter presenting an application to the Customs for taking protective measures, the holder of an intellectual property right may, in accordance with the provisions of the Trademark Law of the People's Republic of China, the Copyright Law of the People's Republic of China, or the Patent Law of the People's Republic of China, apply to the people's court for the adoption of measures to order the cease of the infringing act or for preservation of property against the suspected infringing goods under detention before filing a lawsuit.

A new item 5 has been appended to article 24 of the Regulations, which sets forth the circumstances in which Customs will release confiscated, alleged infringing IPR goods. The additional item states: “… 5) when, before Customs has confirmed that the confiscated goods alleged to be infringing are infringing goods, the IPR holder withdraws the application for confiscation of the alleged infringing goods.” (Id.) The other four circumstances in which confiscated, alleged infringing goods will be released are: 1) when, after confiscating such goods, Customs has not received any court notification for assistance in executing an order within 20 work days from the date of confiscation; 2) when, after confiscating such goods, Customs has not received any court notification, within 50 work days from the date of confiscation, for assistance in executing an order and cannot determine through investigation that the goods infringed an IP right; 3) when the consignee or consignor of goods suspected of patent infringement requests Customs to release the goods after providing Customs with a security equivalent to the value of such goods; or 4) when Customs is convinced that the consignee or consignor has ample evidence to prove that the goods have not infringed the IPR holder's right. (2004 Regulations, supra.)

Where the confiscated goods infringing an intellectual property right can be used for public welfare undertakings, the Customs shall hand such goods over to the relevant public welfare bodies for use in public welfare undertakings; where the holder of the intellectual property right intends to purchase the goods, the Customs may have such goods assigned to the holder of the intellectual property right with compensation. Where the confiscated goods infringing an intellectual property right cannot be used for public welfare undertakings or the holder of the intellectual property right has no intention to purchase the goods, the Customs may have such goods auctioned according to law after removing their infringing features; however, in regard to imported counterfeit trademarks, except in special circumstances, the trademark mark on the goods cannot just be eliminated and the goods be allowed to enter commercial channels; where the infringing features cannot be removed, the Customs shall destroy the goods. (Id.; Decision, supra.)

Finally, the amendment changes article 28 of the Regulations into article 31, adjusting the numbering of the adjacent articles accordingly, and revises the following underlined text to read “shall be handled on the basis of the infringing goods”: “The articles carried on person, or posted, into or out of the territory shall be confiscated by the Customs if the quantity of such articles exceeds the reasonable limit for personal use and such articles have infringed any intellectual property right provided for by Article 2 of these Regulations.” (Id. [both cites].)